Lindt beats expectations

Related tags Lindt Chocolate maker lindt Cent Switzerland

Swiss chocolate maker Lindt & Sprüngli has revealed strong results that
put organic growth in double figures and gave it its first ever
year with no first-half operating loss. The company said the
results had been particularly fuelled by strong sales in the US.

The first half of 2004 saw Chocoladefabriken Lindt & Sprüngli's organic growth increase by 12.1 per cent in local currencies (+15.6 per cent in Swiss francs). The chocolate maker's results normally display a seasonal swing, due to increased sales during the Christmas period. This means that approximately 60 per cent of the company's sales are made during the second half of the year, which invariably reflects better on its performance.

However, the company said that an 'excellent' sales growth in the first half of the year had seen it post its first positive semi-annual operating result.

In recent months, Lindt & Sprüngli's principal markets have shown signs of a moderate economic upturn, with retail sales and consumer sentiment slowly recovering. As well as strong sales in the US, Germany, France, Switzerland, Italy, Spain and the UK, positive trends were in evidence in the pralinés and chocolate bar markets. The chocolate bar segment showed particular momentum thanks to a large number of new products, originating mostly from the Lindt & Sprüngli brands. Particularly in this segment and in the Easter trade, Lindt & Sprüngli set some noteworthy signals with innovative product launches and creative marketing activities.

In the first half of 2004, the Lindt & Sprüngli Group increased its sales by 15.6 per cent in Swiss franc terms to SF778 million (€504.6m), which it said had strengthened its market position in all segments. In local currencies, organic growth stands at 12.1 per cent. With the exception of its Polish division, all subsidiaries contributed to the positive showing, which was above the market average and the expectations of market analysts.

The company also said that results were boosted by external factors, such as a slight improvement in consumer sentiment and cool summer temperatures so far this year. Lindt is still sticking to its long-term strategic growth target of 5 pe to 7 per cent per annum. After the results posted in 2003 and in the first half of 2004, this appears to be within reach despite difficult market conditions.

Looking to the future the company said it believed that if economic conditions remain the same it is confident of its ability to exceed its strategic annual growth target of 5 per cent to 7 per cent in 2004. With regards production the company also said that additional investments will be made to expand capacity with a view to keeping pace with the increased volume growth. This will bring investment levels in 2004 and 2005 above the SF90 million mark.

Although this first half's results were above expectations, the company said that it expected the operating profit (EBIT) and net income for the year to meet current market expectations.

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